Extrait du numéro 12 du Tax Insights magazine

1. EY – Tax Insights for business leaders №12 17
Transparency
all agreed that the right thing to do was agree on
a common template, so that we didn’t end up with
a proliferation. That would have been a disaster
for the business community and not be helpful for
tax administrations either. This all sounds easy,
but it is tedious and extremely complicated to
­negotiate. Our job is to come to practical solutions,
and we’ve done that.
Throughout this process, how would you characterize
the attitude of business?
I’m not sure there is a single position from the
business community. I’ve perceived mixed ­feelings
including recognition that it is not illegitimate
to impose country-by-country reporting, although
some don’t like it and have said that as well.
But, all have rightfully indicated that the cost
of ­compliance should be taken into account and
­flexibility offered so we don’t end up with expensive,
inconsistent, or unreasonable mechanisms.
We have been extremely sensitive to the
­compliance costs of companies. There will be a
­pretty good level of flexibility in choosing the ­method
of doing country-by-country reporting. Some
­companies can take a bottom up approach; others
cannot because of the way their accounts are done
and the level at which they consolidate data. We
leave companies to choose the most ­efficient, least
costly way to report, but they have to stick to it
across time.
What are the next challenges for implementing
­country-by-country reporting?
In the coming months the technical issues need
to be decided, such as whether there should be
­exemptions for small and medium-sized enterprises
and entities which might not be relevant for the
­exercise. We will also look at whether companies
will fill in the template for every country where they
operate or do so once for the tax administration in
their headquarters country and then that tax
­administration would communicate it automatically
to all the others.
An important longer-term challenge is that
­transparency is great, but it doesn’t mean that the
information should be everywhere. It should be just
for tax administrations, and we need to make clear
and have agreement on the process through which
tax administrations will obtain the information.
We have challenges in terms of making sure the
­information is protected, is held confidentially, and is
shared only with tax administrations, but that this
process is done in an efficient, timely manner.
If the process doesn’t happen quickly, pressure may
well grow to make the information public. ı
Pascal Saint-Amans, Director of the OECD’s Center
for Tax Policy and Administration, talked to EY’s
Tax Insights team about the latest progress on
­country-by-country reporting under the Action Plan
on Base Erosion and Profit Shifting (BEPS).
Tax Insights: What do you see as the main points
of agreement coming out of the BEPS discussions this
summer on country-by-country reporting and what
­impact do you hope these will have on the operating
environment for multinational businesses?
Pascal Saint-Amans: A template has been
agreed which will require all multinational countries
to report, on an annual basis, six elements of
­information about every country in which they
are operating to every country in which they are
­operating: turnover, profit, paid taxes, accrued taxes,
number of employees, and assets deployed to
­conduct business activity. It has also been agreed
that this information will go to tax administrations
only and not to the general public.
This is a massive agreement.
We have all 44 of the G20 and OECD
countries — 90% of the world economy —
agreeing on an equal ­footing, which
I think proves how ­important it will be.
Very simply, the completed template
will help to stop aggressive tax
­planning and change practices that are
currently about divorcing the location
of ­business activities from the location
of taxable profits. We’ve come to a
point where the international tax
framework is used to plan non-­taxation
and this will come to an end through
the ­measures we are ­developing.
Tax ­administrations will be able to
­identify very clearly, in a single
­document, whether or not they “smell
a rat,” such as where, for ­example,
you have all your profits in a zero tax
jurisdiction where you have no sales,
no ­employees and no assets.
What have been the major stumbling
blocks to progress in this area?
The idea of country-by-country
­reporting has been in the air for some
years, but there was no progress because of a lack of
strong ­political support. We got that support in 2013,
both at the G8 Leaders’ Summit, which requested
a template on country-by-country reporting, and then
at the G20. Once we had the political ­commitment,
it was easier to negotiate. Clearly countries do not
have the same views. But they
Introducing BEPS
Pascal Saint-Amans
Director, OECD’s Center for Tax Policy
and Administration. Saint-Amans was
­appointed as Director of the Center for
Tax Policy and Administration (CTPA)
at the OECD on 1 February 2012.
Prior to this, he played a key role in the
­advancement of the OECD tax transparency
agenda in the context of the G20.

2. 18 EY – Tax Insights for business leaders №12
Transparency
of persons who
are not tax ­specialists. This is probably
the biggest concern for companies. “We
are all for disclosing information to the tax
authorities, but have reservations about
having to disclose what is essentially
‘raw state’ information to the public. There
are many lawful reasons why a tax payable
might differ from say 30% of your
accounting profit, but without tax specialist
knowledge the information is open to
­misinterpretation,” says Dana Moscaliov,
Senior Tax Advisor at DOF ­Subsea
­Australia, an engineering company in the
oil and gas ­industry.
Addressing this aspect of transparency
will require reconsideration of how
businesses discuss tax. For example,
Rio Tinto and ­Vodafone, in order to
give a more holistic view of their societal
contribution, have ­issued public reports.
These include country-by-country
­information not just on corporate income
tax but also on royalties and payroll taxes
of employees. Doing this is not a simple
matter of releasing data — it requires a
­cultural change.
Such a voluntary report may not
be the optimum strategy for other
­companies, says Barbara Angus. “It is
something that companies need to think
about strategically — to think about
what the information will show, and about
where they will need to be able to tell
the full story beyond the particular
data points.”
Finally, in an atmosphere of greater
transparency, firms need to be certain that
if their tax affairs become public, they
will pass increasingly stringent regulatory
and public scrutiny. George Trollope,
Vice President Tax at Sasol, a South African
­energy firm, explains that the shift
toward tax transparency has swung the
balance in favor of tax planning developed
within the business context. “As in the
past, our focus today, and very much the
driving principle of our approach to tax
is a tax ­policy that is aligned with the
group’s ­business strategy,” says Trollope.
A more transparent world is on
the ­horizon. This will require not just the
­release of information but new ways
of thinking about how tax data is gathered
and presented.ı
continued from page 16
What began as a multilateral agreement to ­cooperate on tax matters led later to ­measures
to ensure greater ­accountability in the financial ­industry and
to current ­efforts aimed at establishing a global standard for tax transparency.
Laying the
groundwork